Smarter Consumers Borne out of Epidemic
China Today (English)|August 2020
To mitigate the economic fallout of the ongoing COVID-19 epidemic, China has been boosting consumption with a host of incentives including tax cuts, subsidies, and vouchers for consumers. As a result, the recovering consumer market is indicative of China’s economic resilience. The epidemic will probably not come to an end soon, but while hitting the economy hard, it is also reshaping consumption in many ways.
KANG PU

Recovering Consumption

As the epidemic ebbs away, many Chinese cities have relaxed social-distancing restrictions. Streets are alive again as people begin coming out of their homes and line-up to treat themselves at food stalls and restaurants.

“Finally, I can pamper myself with a decent meal,” said Zhao Xinqi, a resident in Wuhan, the city hit the hardest by the coronavirus. Tired of eating food she prepared herself at home and the delivered take-out food over the past two months and more, Zhao had spent the past several days eating outside, to appease her palate needs for gourmet food.

The catering sector was the first to know that the pent-up demands started to release. “Restaurants have been seeing brisk business particularly after the COVID-19 tests for all residents in Wuhan assured us that it is safe to dine out,” said Xu Ping, a senior manager from Wushang Plaza, a leading shopping hub in Wuhan. “Restaurants have been packed.”

Another sector on the recovery track is retailing. Many cities across China rolled out vouchers to spur consumers to consume. The shopping craze is particularly eye-catching on online platforms. For example, JD.com witnessed a 500 percent jump in grocery sales on June 18, a shopping spree day originally curated by the Chinese e-commerce giant. From June 1 to 17, the sales of more than 3,000 varieties of products on JD.com hit RMB 1 million (US $141,600).

“The epidemic has reinforced consumers’ habit of shopping online,” said Zhao Ping, director of the department for international trade studies at the Academy of China Council for the Promotion of International Trade. Notably, live streaming has given a big boost to online sales. Apart from selling goods, businesses have gone online through live streamed activities to persuade consumers to pay for services relating to such areas as traveling and fitness. “As epidemic prevention becomes a routine of our daily life, online consumption is very likely to maintain its robust momentum,” Zhao said.

Chinese shoppers also brought hope to the luxury goods industry. L’Avenue Shanghai, a flagship shopping center for luxury brands, logged surging sales earnings during the month of April. The figure for Louis Vuitton products went up 25 percent, Van Cleef & Arpels jewelry 57 percent, and Dior products 112 percent compared with the previous month.

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